Which of the Following Refers to an Approach to Risk

question 54

Multiple Choice

Which of the following refers to an approach to risk management that aggregates risk?

• A)Risk pooling
• B)Risk optimizing
• C)Risk capturing
• D)None of these answer choices is correct.

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Definitions:

External Failure Cost

Costs incurred when a defective product or service is discovered after delivery to the customer, including returns, repairs, and lost sales.

Prevention Costs

Costs incurred to prevent defective units before they are produced. For example, reengineering products or production processes.

Appraisal Costs

Costs associated with the evaluation and inspection of products or services to ensure they meet quality standards.

Internal Failure Costs

Costs incurred when a defect is discovered before being received by a customer.